Feb 18, 2010

Steps for a successful cross sell effort

Introducing Cross Selling

It is a well-known fact that cross-selling – selling an additional product or service to an existing customer – is an old and valuable technique used by salespeople in order to transform single-product buyers into multi-product ones. More recently, cross-selling has evolved into a strategy for customer relationship management.

- Today, with increasing competition, companies have come to realize that it is easier to maximize profit by cross-selling services to existing customers than to attract and gain new customers

- Thus, would it not be great if you would know which customers are likely to buy your product – which products they are most likely to buy next? There is an article called “Which customers are worth keeping and which ones aren’t? Managerial Uses of CLV” posted by Wharton which focuses on the following idea:

“For many companies, their whole business revolves around trying to understand which customers are worth keeping and which aren’t… The goal is not only to identify customers, but to reach out to them through cross-selling, up-selling, multi-channel marketing and other tactics – all of which are tied to metrics on attrition, retention, churn and a set of statistics known as RFM – recency, frequency and monetary value.”

Steps for a Successful Cross Sell Effort

  1. Put yourself in your customer's shoes - Would you like to be pushed by more and more products and services rather than your needs?

- If your answer is no, then the key for a successful cross-selling is to focus your efforts on meeting the customer’s needs. Thus, this is the first step you can start by

  1. Do your employees know the real technique behind their cross sell effort?

- Employees’ approach must be developed around serving the customer, not just selling more. Make sure that, your employees are aware of and they are able to implement how the additional products or services would complement the original purchase and further solve the customer’s problem

  1. “Would you like fries with that?"

- This fast food phrase is a widespread spoken example of cross sell. The answers can be wide but they are related. Hence, in order to cross sell, you simply have to mention that the other related products or services are available and you will see that cross-selling opportunities will occur naturally

  1. Bundling products or services?

- Offering a price break on package deals has always facilitated sales. And thus, customers are confronted with not just a single item, but an entire group of items that go together. Thus, customer will be aware of the next product or service and moreover will have the chance to experience it

  1. Next offer means additional price for the customer

- Try to offer a mix of price levels. The lowest cost products or services are most likely to be selected as impulse buys, however other items that meet the customer’s needs can also sell at higher levels

  1. Can you leverage your customer data for an efficient cross sell effort?

- Successful cross-selling mainly depends on the detailed data you have about your customers. When you have it, you need to analyze and create models for each product or offering. These models then will create best next offers for each customer by the scores each customer get. An article called “Using Predictive Analytics to Determine the Best Next Offer” by DM Review underlies the importance of customer analytics and praises the following;

“Successful cross selling/up selling requires more than having an array of attractive products. The successful cross seller needs to know what specific products it should offer to whom and how predictive the outcome will be…..”

Success Stories

Cross-selling can either be one of the most profitable and least risky endeavors a company can undertake; “Using Web Analytics to Cross-Sell” published on ClickZ implicitly refers to a success story of amazon.com’s cross sell efforts. If not properly administered and monitored, your company can easily face the risk of losing customers and creating conflict within your sales team

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